In one of the largest ever local real estate scams, five Toronto-area residents face more than 100 fraud-related charges in an alleged real estate scam that sold parking spaces as condos to innocent investors, police say.

Bankers, developers, a lawyer and real estate agents allegedly worked together to defraud TD Bank of $3.8 million in bogus mortgage loans. The alleged scheme ran from 1998 to 2000. Police claim two brothers, Kam Cheung Chan and Patrick Chan, enticed their victims to invest in two condominiums.

Police said the Chan brothers had victims fill out a mortgage application but didn’t ask for any money up front, waiving the down payment.  Bank employees who were allegedly in on the scam made sure the mortgage loans sailed through. Then the suspects kept the cash. The thieves were apparently selling parking and storage spaces, not condos, for about $300,000 each.

Unsuspecting investors were promised a cut of profits when the properties sold. But they never got a penny. “Sometimes they were recruited off the street or at investment seminars,” Ellis said. “You have to realize these people were … unsophisticated (about) real estate transactions.”

Five suspects face 135 charges. Canada-wide warrants have been issued for two more suspects.

The TD Bank at Weston Rd. and Finch Ave. provided the funds for the mortgages. Bank officials blew the whistle on the case when problems arose with the accounts.

Kelly Heckler, spokesperson for Toronto Dominion, said the bank has re-evaluated its security measures. “We have long since tightened our procedures. We reviewed what happened and how it happened. But for security reasons I am not going to get into details.”  Heckler wouldn’t say whether the stolen funds were recovered.

Patrick Chan, 61, of Richmond Hill; Lascelles Williams, 36, of Pickering; Saquib Majeed Baig, 38, of Markham; Steven Mucha, 53, of Toronto; and Roland Williams, 70, of Mississauga face fraud and other charges. They are scheduled to appear in court on Feb. 25.

Canadawide warrants have been issued for Ling Ling Cho, 45, of Markham, and Kam Cheung Chan, 54, of Mississauga, who are also wanted on charges of fraud.  It is amazing the scam ran for such a long-time, great to see this one taken down.

Buyers racing to beat Toronto’s incoming land transfer tax created an unusual rise in home sales over the holiday season, but a slowdown is around-the-corner after the tax comes into effect.

As of Feb. 1, Toronto home buyers will pay a new fee to the city in addition to the existing provincial land transfer tax. It will nearly double the tax bill for home buyers, raising the tab on a $375,000 home to $7,575 from $4,100. Housing unit sales were up approximately 21 per cent in the GTA in the fourth quarter, compared with 7 per cent in surrounding areas, according to data from the Toronto Real Estate Board.

The strong fourth quarter helped the Toronto market shatter previous sales records in 2007, according to data released by Royal LePage. The average price of a two-storey detached home in the city hit $506,900, up 8 per cent from last year. The price of a detached bungalow rose 8.9 per cent to $413,375, and that of a condo unit rose 10.4 per cent to $280,505.

Two years ago a two-storey home in the city averaged $461,282, while a bungalow went for $362,611 and a condo unit $242,202. After the current wave of buyers subsides, both price gains and sales should start to decline. Let’s just hope the decline is not too steep.

Thanks for dropping in on our new real estate themed blog.  This is where you will find news and commentary about what is happening in the world of real estate and also on our real estate portal.  Hope your stay is enjoyable.